The Consumer Financial Protection Bureau (CFPB) final Loan Originator Compensation rule applies to seller financers. The CFPB released the rule on January 20, 2013, as part of its implementation of amendments to the Truth in Lending Act (TILA) made by the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted on July 21, 2010. The final rule takes effect on January 10, 2014.
TILA, as amended, and CFPB’s implementing regulations exclude from the definition of loan originator some sellers who provide seller financing. CFPB has provided some flexibility in the new final rule by excluding from the definition of loan originator two categories of seller financing: those that sell 3 or fewer properties in any 12-month period and those that sell only one in any 12-month period, and in both cases meet other criteria.